Apple has today received a 500 million euro fine (about $570 million) from the EU commission under the Digital Markets Act. The commission said the fine relates to Apple’s App Store anti-steering policies.
The DMA requires that app developers should be able to inform customers of alternative purchasing options outside of the App Store, and direct customers to those alternative payment options, free of charge. Apple’s rules currently do not allow for this …
The EU says the 500 million euro amount was decided based on the gravity and duration of Apple’s non-compliance.
The EU announcement does not specify exactly what it finds to be in breach, although it likely relates to Apple’s App Store fee structure. Apple currently charges a commission of more than 17% on purchases made outside of the app. This would be in opposition to the DMA’s requirement that these abilities be offered “free of charge”.
As such, the EU finds that app developers “cannot fully benefit from the advantages of alternative distribution channels outside the App Store”.
In addition to the fine, the EU orders Apple to remove technical and commercial restrictions on all relevant steering provisions. This means we should expect Apple to announce policy changes to the App Store rules shortly, or else face further fines.
Separately, the commission has taken a preliminary view that Apple has not complied with its obligation to allow for the distribution of apps outside of the App Store, i.e. its support for third-party app marketplaces in the European Union is not good enough. The commission says developers are disincentivized from doing so due to the required agreement of alternative business terms, which includes the Core Technology Fee. It also says Apple has purposely made the process of using alternative app marketplaces too difficult and burdensome on end users.
Apple can now formally reply to the preliminary decision, and await the EU’s response. Apple could face additional fines on this matter in the future.
Some good news for the company, however, is that the EU found Apple’s changes to iOS in regard to offering user choices to system defaults as sufficient. This includes things like the default web browser choice screen that is shown to iPhone and iPad users in the European Union, new settings for changing default apps for calling, messaging and other features, and the ability to completely uninstall system apps like Safari.
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